Identification of the Mexican Monetary Policy and the Fiscal and Monetary Indicators

Topics: Monetary policy, Inflation, Macroeconomics Pages: 4 (1273 words) Published: May 8, 2013
To identify the fiscal and monetary policy tools used by Mexican Presidents since Miguel Aleman and Make clear the fiscal and monetary indicators that define each policy the economic models of that time must be examined; from Miguel Aleman to Felipe Calderon there has been just 3 Economic Models:

a) 1940-1964: Import substitution model. (Modelo de sustitución de importaciones) b) 1964-1982: Stabilizing development model. (Modelo de desarrollo estabilizador) c) 1982- ………: Neoliberal model. (Modelo neoliberal)

in order to understand this models and its implications it’s important to make sure a clear understanding about the policies.

The Macroeconomic policy affects a country or region as a whole. It deals with the monetary, fiscal, trade and exchange regime, as well as economic growth, inflation and national rates of employment and unemployment. Changes in demand and aggregate supply can cause short-term fluctuations in output and employment. The monetary and fiscal policy can shift aggregate demand and, therefore, influence these fluctuations.

a) 1940-1964: Import substitution model, presidents on it: Manuel Ávila Camacho, Miguel Alemán Valdez, and Adolfo Ruiz Cortines.

In the import substitution model, the management of public finances, which sought to redistribute income and promote domestic production, contributed to the process of industrialization and modernization in Latin America. Fiscal functions got away from their initial orientation because there were a change in the economic conditions that had raised the model in the first place, and also because the controls imposed to streamline the management of foreign exchange and boost production became privileges that promoted a rentier economy that masked productive investment generated a high concentration of income and limited the expansion of the domestic market.

In 1940 this model was implemented. Because of World War II, increased demand for Mexican goods which also raised the...

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